Which of the Following Is an Appropriate Definition of a Currency

question 2

Multiple Choice

Which of the following is an appropriate definition of a currency swap?

• A)A swap used to hedge against exchange rate risk from mismatched currencies on assets and liabilities.
• B)A swap used to hedge against the general depreciation of a currency.
• C)A swap used to hedge against the general appreciation of a currency.
• D)A swap used to speculate on the depreciation or appreciation of a currency.

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Definitions:

Marginal Product

The incremental output produced by adding one more unit of a specific input while holding other inputs constant.

Wage Rate

The wage rate is the amount of money paid for a specific quantity of labor or service, often expressed per hour, day, or piece.

Purely Competitive

A market structure characterized by a large number of firms producing homogeneous products with no single firm influencing the market price or supply.

Variable Input

An input in the production process that changes in quantity with variations in the level of output.